McGlone Warns SPX Pullback Could Send Bitcoin Price to $10K – Bitcoin News

Bloomberg’s McGlone: Bitcoin’s ‘A Dud,’ ‘Beta’

While the cryptocurrency market enjoyed one of its finest Augusts ever, with Bitcoin prices jumping nearly 25%, some believe $80K might be a tough wall to overcome.

Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said bitcoin could fall after this growth. McGlone stressed that bitcoin was still considered “a highly volatile and speculative digital asset, correlated with the stock market and now burdened by being beta for millions of crypto companions,” even when the currency has recently shown a strong correlation with reserve assets like gold.

On social media, the analyst commented that bitcoin’s performance roughly matched the SPX during the last five years, but with volatility three times higher. “By the rules of risk and portfolio management — that’s a dud,” he declared.

McGlone mentioned three key reasons that might draw Bitcoin’s price lower: the surge of the $80K level as resistance, the pricing of 0.70% in hikes by Fed funds futures for the next year, and the high valuation of the SPX compared to its 200-week moving average.

“Bitcoin fits into my stock-puppet category due to its high correlation with the SPX, especially when beta declines, and its position as the first cryptocurrency now competing with millions of others,” he stated.

McGlone calls stock puppets all assets deeply correlated to the SPX, including gold and other precious metals, bitcoin, and bond yields, that would inevitably tumble down in a potential market drop given the stretched valuations of public companies.

Nonetheless, if McGlone is right, bitcoin might act as a leading indicator for so-called “risk assets,” as he vaticinates that the prime cryptocurrency might be on a route to reach a historic $10,000 key level, prompted by a 20% drop in the SPX.

“Proving that scenario wrong may require the crypto to sustain divergent strength,” McGlone concluded.